The effect of Foreign Direct Investment on economic growth of Pakistan

Abstract

This study assesses the relationship between foreign direct investment and economic growth of Pakistan. The method of ordinary least square (OLS) has been used, utilizing time series data for the period 1980-2013. Our study found that, in case of Pakistan the results are significant showing that there is important relationship between economic growth and foreign direct investment. The study also give some recommendations including; making law & order situation better, provision of electricity, political stability and establishment of separate bench on the ministry of finance to attract foreign investment.

Key words: Economic growth, foreign direct investment, developing country.